Sugarcane FRP Raised to ₹365/Quintal for 2026–27 Season; Farmers to Benefit from Higher Returns

The Centre has approved an increase in the Fair and Remunerative Price (FRP) of sugarcane by ₹10 to ₹365 per quintal for the 2026–27 marketing season starting October. The decision, cleared by the Cabinet Committee on Economic Affairs under the leadership of Narendra Modi, reflects continued policy support for India’s agrarian economy.

The revised FRP applies to a basic sugar recovery rate of 10.25%, marking a 2.81% increase over the current season’s ₹355 per quintal. The move is expected to benefit nearly one crore sugarcane farmers and ensure liquidity across the rural economy.

Incentives for Higher Recovery and Farmer Protection

The government has retained an incentive-linked pricing mechanism to encourage efficiency. For every 0.1% increase in recovery above 10.25%, mills will pay an additional ₹3.56 per quintal. This structure aims to reward better quality cane and improve overall sugar output.

Importantly, the policy also safeguards farmers supplying to mills with lower recovery rates. No deductions will be made for recovery below 9.5%, ensuring a minimum payment of ₹338.30 per quintal. This provides income stability, particularly for farmers in regions with lower recovery levels.

The FRP remains significantly higher than the estimated production cost of ₹182 per quintal, offering a margin of over 100%, reinforcing profitability in sugarcane cultivation.

Sector Impact and Payment Trends

The hike is expected to translate into payouts exceeding ₹1 lakh crore to farmers, strengthening rural consumption. The decision follows recommendations from the Commission for Agricultural Costs and Prices and consultations with states and industry stakeholders.

India’s sugar sector supports nearly five crore farmers and their families, along with around five lakh workers in mills and allied industries. Timely payments remain a key focus area. In the 2024–25 season, about 99.5% of dues were cleared, while 88.6% has been paid so far in the ongoing 2025–26 cycle.

Additionally, the policy supports ethanol production from surplus sugarcane, aligning with the government’s broader biofuel and energy diversification goals.

Read more: Centre to Extend ₹4,000 Crore Emergency Credit Programme to Airlines Hit by West Asia Disruptions.

Conclusion

The upward revision in sugarcane FRP underscores the government’s continued emphasis on farmer welfare and rural income stability. By balancing higher returns with productivity-linked incentives, the policy aims to sustain growth in the sugar sector while supporting ethanol blending targets and ensuring financial health across the value chain.

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